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TMI Blog2015 (8) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for staff is allowable as input service. (E) Whether receipt (foreign remittance) can be claimed on the basis of service provided during the refund period, although invoice was raised after the quarter, when service was rendered. (F) Whether rejection of refund is justified on the ground that the export invoices for service which were raised for the previous quarter in the next quarter i.e. for January -March, 2012 in the next quarter April-June, 2012, rebate has been claimed w.e.f. 1.4.2012, which amounts to double claim. 2.1 The details of refund claim are as under:- Sr. No. Appeal No. Period Amount claimed (in INR) Amount Sanctioned (in INR) Amount Rejected (in INR) 1. ST/818/12 Nov 08 to Mar 09 18,15,726 NIL 18,15,726 2. ST/88435/14 Apr 09 to Sep 09 16,15,704 NIL 16,15,704 Oct 09 to Mar 10 18,44,079 18,03,490 40,589 3. ST/88436/14 Apr 10 to Sep 10 13,88,751 9,68,012 4,20,739 4. St/88438/14 Nov 11 to Mar 12 1344016 3,02,672 10,41,344 TOTAL 80,08,276 30,74,174 49,34,102 3. The appellants are service provider, exporting 100% of its service being a 100% Exporter to one single client located outside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elated to investments opportunity in India. Further, reference was made in the impugned order, to the agreement between the appellant and their clients which provides that the appellant was appointed for the purpose of advising and making recommendations on the investment opportunities etc. in India. 4.2 Having considered the rival contentions on this issue, I hold that as the reports have been exported and the same have been utilized outside India, and remuneration for the services have been received in convertible foreign exchange, the appellant satisfied both the conditions under Rule 3(2) (a) & 9b) of the Export of Service Rules, 2005. Accordingly, I hold that it is export of service. I further hold that it is immaterial how the foreign client utilizes the reports prepared by the appellant. Similar view has been taken by this Tribunal in the case of N.V. Advisory Pvt. Ltd. [Application No.ST/98183 to 98185/13 ] and Bain Capital [Appeal No. ST/88442/2014 ]. 5. The second issue is whether the appellant have received remittance in convertible foreign exchange. The Assistant Commissioner in Order-in-Original dated 5.8.2008 has observed that the appellants have received all the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted currency (2) In respect of an export from India, payment shall be received in a currency appropriate to the place of final destination as mentioned in the declaration form irrespective of the country of residence of the buyer." It is evident from the aforementioned table, at Sr. No. 2 that the appellant's Bank at Mumbai have rightly received the money in Indian rupees as RBI permits payment in rupee from the account of a Bank situated in any foreign country other than a member country of Asian Clearing Union. Thus, the foreign remittance is in order. 5.2 The learned Counsel further explained that the modus operandi of the Bank is, if a Bank received foreign currency abroad from the buyer of service and thereafter Bank converted it in INR and diverted the said INR to their branch in India. The whole mode of payment is as per the RBI guidelines, the learned Commissioner (Appeals) is in error in concluding that the remittance had not been received in foreign exchange under the Export of Service Rules. 5.3 Accordingly, I hold that the appellant has received the remittance in convertible foreign exchange. 6. The third issue is whether there is correlation between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant that they are providing the export of service to only one client and all remittances are received from the same client and the whole billing is to the same client. The appellant undertakes to provide the re-calculation and details of the bills raised. Hence, on this issue, I remand the matter to the adjudicating authority, who shall after allowing the opportunity of hearing and perusing the evidences produced till the date of hearing before him, will examine the correlation of bills with FIRC. In case it is found that the appellant have received the remittance for the bills raised, the claim of the refund cannot be rejected. The remittance may be received either prior to the bills raised or post billing. 7. The next issue is with regard to disallowance of input service of life insurance premium paid on the life insurance of the staff of the appellant and also as regards the Rent-a-cab services availed for the travel of the staff of the appellant. In the impugned order it has been held that these expenditures are in nature of welfare activities of the appellants and in no way connected with the export of services provided by them. Reference was made to rule 2(l) of the Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned AR relies on the impugned order. The learned AR further states that the expression "used in or in relation to manufacture of the final products" in the specific and substantive part of definition, is so wide that it would cover innumerable items as "input" and to avoid such contingency the Legislature has incorporated the inclusive part after the substantive part, qualified by the place of use. For example, one of the categories mentioned in the inclusive part is "used as packing material". Packing material by itself would not suffice, till it is proved that the item is used in the course of manufacture of final product. Mere fact that the item is a packing material value of which is included in the assessable value of final product will not entitle the manufacturer to take credit. Oils and lubricants mentioned in the definition are required for smooth running of machines, hence they are included as they are used in relation to manufacture of the final product. 7.4 In reply, the learned Counsel for the appellant argues that they are raising the bills on cost plus basis. The sample bill/invoice dated 14.6.2009 raised on their client at Mauritius for service for the period q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 for the services rendered during the period. The scheme of refund under Notification No. 5/06-CE, no where provides that claim period should be same for both receipt of input service as well as billing for output services and/or export of goods. What is required is that due to the nature of the business of the appellant, they are unable to utilize the CENVAT Credit availed, being export of goods/service. 8.2 Having considered the rival contentions, I hold that the learned Commissioner (Appeals) is in error in considering one to one correlation and/or correlation with the bills raised for the each receipt or bill period. In view of the admitted fact that appellant is a 100% exporter and all its output services are exported to a single client located abroad and all the payments are received from the same client, this issue is decided in favour of the appellant. I have already remanded the issue of correlation of the remittances and invoices. 9. The last issue in these appeals is whether invoice for the period January to March, 12, which was raised subsequently during the subsequent quarter April to June, whether the Revenue is justified in rejecting the claim stating that as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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